US Supreme Court abolishes political funding restrictions

The US Supreme Court has abolished key restrictions on political funding by corporations and trade unions, throwing open the floodgates for spending in future elections.

By Alex Spillius in Washington

6:46PM GMT 21 Jan 2010

The 5-4 ruling split the court along conservative and liberal lines.

It was a defeat for the Obama administration and supporters of campaign finance laws who said that ending the limits would unleash a flood of corporate money into the system in a bid to control policy.

Opponents said it threatened the trend for ordinary people influencing elections, after a dramatic increase in small, online donations transformed Mr Obama's 2008 campaign.

Justice John Paul Stevens said: "The court's ruling threatens to undermine the integrity of elected institutions around the nation."

But Justice Anthony Kennedy said the limits had violated free-speech rights preserved by the first amendment of the constitution.

"We find no basis for the proposition that, in the context of political speech, the government may impose restrictions on certain disfavored speakers," he wrote.

The ruling however does not allow corporations to donate directly to candidates. Money can only be spent on their behalf, meaning that most freed-up funds would be spent on advertising.

The name of any company paying for an advertisement would also have to be disclosed, leading some analysts to conclude that big businesses may be wary of tieing their colours to one party or another.

"Large corporations like to play both sides of the aisle," said Dave Levinthal, a spokesman for the Centre for Responsive Politics in Washington.

The biggest beneficiaries could be large pressure groups who are incorporated, such as the pro-gun rights National Rifle Association which has long complained of being muzzled.

"It's going to be the Wild, Wild West," said Ben Ginsberg, a Republican lawyer who has represented several party presidential campaigns.

"If corporations and unions can give unlimited amounts it means that the loudest voices are going to be corporations and unions."